goals Archives - Sharkey, Howes & Javer

Many of us dream of the days of not having to work and traveling whenever we please. Some of us dream of living in a home owned outright. Some are looking for the security of a large nest egg to know loved ones will be taken care of when we are gone.

Whatever financial freedom means to you, there are a few important habits to help get you there.

Automate Savings and Payments We live in a digital world and with it comes helpful tools, such as automation. Set up an automatic withdrawal from your paycheck to your retirement and savings accounts to make it feel like it was never there in the first place. Avoid unnecessary fees and keep your credit score high by setting up automatic payments for your mortgage, insurance and credit cards. These small things can help reduce stress and keep you on track to financial freedom.

There seems to be conflicting advice in modern media. On one hand, there are plenty of articles stating the importance of saving money. On the other hand, there is an emergence of articles encouraging living for today and letting the money “work itself out later”. This leaves the audience confused and internally conflicted. Should I live for today or save for tomorrow?

The answer can be deeply personal, and while your family or advisor may offer advice, ultimately the decision is yours. It is no secret that life can be short and there is no guarantee of tomorrow. Embracing and living every day to the fullest can be vitally important for your emotional and mental health. Spending your hard-earned money to travel, further your education, pursue a hobby, support a loved one, or explore your creative mind may provide much more personal fulfillment now than building a savings/investment account for your future.

Outside of a portfolio’s rate of return, it’s often easy to overlook the value that objective, client-focused financial planning brings. Although many financial professionals offer “free” services, do you stop and ask yourself “Hmmm, I wonder how he/she is paid if it’s not by me?” (source).

As objective financial planners, we fully support the “you get what you pay for” belief. Below is a list of just a few of the values we believe objective planning offers. Please feel free to let us know your thoughts on any of the following.

According to Bob Veres, “…the Wall Street firms that pretend to offer financial planning guidance are seldom (if ever) looking out for the best interests of their customers.” Unfortunately, as a consumer in our industry, it’s not always easy to recognize when there’s an underlying motive or incentive behind the financial advice you receive.

Brokers might have business cards with the title of “Financial Advisor,” but in reality are often simply salespeople who are paid by their company to sell you as many products as possible. Unless they are a fiduciary, they are expected to do what is in the company’s best interest, not what is in your best interest. They are rewarded when they meet sales targets, and bonuses are often based on the clients they sign (source).

The last kid has left for college or to start their career. As the past few years have gone by perhaps you have wandered from room to room wondering why you are paying for all this space or wishing your space was better used. It could be time for you to consider downsizing or maybe your home is in need of a few simple renovations.

Before you make the decision to stay or go, here are a few things to consider:

Have they really flown the coop?

It is becoming more common for college graduates to move back in with their parents for a while as they find a job and establish a career. Do you want to stay in your home and wait to see if they need their space again? Before making the decision to move, think through the possible scenarios with your children to determine if it makes sense to hold onto the family home for a while longer.

We experienced lots of thrilling and unnerving action both up and down the court in the markets. At year-end 2014, the S&P 500 was the All-star and International positions were the under achievers. The opposite proved true in the first quarter of 2015. The chart below captures the S&P 500’s volatility during various periods as it rotated between winning and losing for an overall quarterly return that was just under 1%. Lots of action – not much traction!

Uncertainty around the interest rate policy of the Federal Reserve has contributed much to the volatility. Fed Chair Janet Yellen’s last statement announced, unhelpfully, that the Fed is “data dependent” and the pace of interest rate increases could “speed up, slow down, pause, or reverse.” The main driver of the stock market is always corporate earnings, rather than political or media pronouncements. The strengthening U.S. dollar hurt U.S. companies’ foreign earnings, which were down 5.3% in the 4th quarter 2014. A strong dollar makes U.S. purchases abroad cheaper and foreign purchases of U.S. products more expensive. Most of the companies in the S&P 500 receive at least 50% of their earnings from abroad.

Karlton does an excellent job of summarizing our investment process in the video above. The investment process with us is more than a onetime event, it is an ongoing process.

The process looks like this:

Define Goals and Objectives

Set Portfolio Expectations

Determine Asset Allocations

Monitor Investments

Review Regularly

We never consider our investment process to be ‘finished.’ Your circumstances change over the years and we will make sure we keep the process going to keep your portfolio on track. We’d love to set up a complimentary consultation for you to come in and learn more about our investment process and SH&J philosophy. Give us a call today at 303.639.5100.